War bonds: will the Russians be obliged to pay for the special operation at the expense of their salaries?

Yekaterina Maksimova

The first to talk about such a prospect as issuing war bonds was businessman, millionaire Igor Rybakov. He outlined this perspective on the same day that President Putin announced a partial mobilization.

Rybakov began the special episode on his YouTube channel with the following words: "This is just a giant panic. The population will become poorer, the budget of the Russian Federation will be in deficit. Everything that the president said will require huge funding. And we will deal with the financing of mobilization measures".

According to Igor Rybakov, additional costs for new production facilities in the defense industry, partial mobilization are estimated at several trillion rubles.

"And this is just the beginning. Where to get this money? Of course, this money will need to be taken. Either printed, or borrowed from the population. And if, for example, borrowed, these are the famous war bonds. War bonds are a way tie up the money supply so that it does not go to excess consumption tie up this money supply and send it to military needs, mobilization needs Traditionally, during some kind of wars, military clashes and skirmishes, the government resorted to issuing so-called war bonds. ", Germany issued, the Soviet Union issued. Everyone issued bonds during wartime. Therefore, it is possible that we will finance all these mobilization measures," said businessman Igor Rybakov.

He made a reservation: he is not sure whether it will be or not, but he believes that, rather, yes. “Because the huge expenses during these cataclysms cannot be covered from the budget. Otherwise, hyperinflation will start. Tomorrow a loaf of bread will cost a million rubles, and these are other problems,” summed up the millionaire Rybakov.

The authors of the m-channel Spydell_Finance are inclined to a similar scenario. "In the current circumstances, there will be a priority of military spending over social, over economic, not to mention technology and the development of human capital. All this will lead to an increased budget deficit, as the economy will shrink (revenues will fall), and expenses will grow. .The budget deficit will force the government either to issue war bonds with semi-compulsory redemption by the population on a monthly basis partially from the salary (indirect tax), or direct monetization of the public debt through the Central Bank.In any case, we should expect a frontal increase in taxes and fees, both on business and on the population. First on business (which is already happening with exporters), then on everyone else", - predicts Spydell_Finance .

However, Grigory Dobromelov, director of the Institute for Applied Political Research , is sure that there can be no question of any issue of military bonds. The political scientist considers the federal budget deficit in 2023 (2% of GDP) insignificant.

“It is quite possible to cover it from internal borrowings. You don’t need to issue any obligations for this. You see, this is a very strange story when the state increases social payments and at the same time says: let’s use your own social payments that you receive, you all together chip in. No one will do this. I would not discuss it at all in this context. These are fantasies. There is no real basis for this, because so far, from the point of view of the economy, everything is relatively good. The planned income and expenses will be received if there is no any kind of force majeure. Why waste a high rating of power on a dubious and ineffective decision", - Grigory Dobromelov, head of the Institute for Applied Political Studies, expressed his position.

In Russia in the past 20th century, war bonds were issued during the reign of Emperor Nicholas II - the issue of 1914-1916. Then the population of the Soviet Union invested their money through bonds during the Great Patriotic War.

Novye Izvestia reported how Russia's defense industry reacted to Vladimir Putin's speech, when he gave a direct order to immediately increase the production of weapons and ammunition. Defense enterprises of the country are already working in three shifts.

Doctor of Economics, Professor at the Higher School of Economics Iosif Diskin noted that all this will require significant financial investments, but issues related to increasing funding for the defense industry are directly related to military secrets.

“Defense spending is a military secret. These are closed budget items, the disclosure of which is a criminal offense. Over 3 trillion rubles have been allocated for the defense industry in the federal budget, and we are talking about funding for updating the production base, expanding cooperation, and much more is needed "These are different programs - including those for closed budget items. If someone tells you a figure, it will either be fiction, or the message of this amount will lead to Lefortovo," economist Diskin previously commented to "NI".

Recall, the day before, Prime Minister Mikhail Mishustin announced the main parameters of the federal budget for 2023. The budget will be in deficit - it is projected at the level of 2% of GDP or 3 trillion rubles. Revenues are planned to be about 26 trillion rubles, expenditures - 29 trillion rubles. Mishustin said that the government plans to close the cash gap of 3 trillion rubles mainly through borrowing.